Full hospital beds, overwhelmed medical staff and a health-care system stretched to the brink — I saw the darkest days of the pandemic through the eyes of my husband, an emergency room physician who treated his first COVID-19 patient in early March 2020. As a research analyst and portfolio manager covering the health-care sector, I believed that prospects for quick relief were dim. It typically took a decade to discover a compound, go through clinical trials, get Food and Drug Administration approval and eventually get to market with a new drug. To my surprise, my husband received his first dose of the COVID vaccine a mere 10 months later.
The rapid development of the COVID-19 vaccine is just one example of how the pandemic has impacted the health-care industry. In fact, in my 20 years as a health-care analyst, I have never seen a period like the last 18 months in terms of scientific innovation and business model evolution.
This transformation couldn't come at a more opportune time as a new health-care crisis is looming. Currently, 10,000 Americans are aging into the Medicare system every day. By the year 2030, every baby boomer will be over the age of 65 and 1 out of every 5 Americans will be of retirement age. By 2035, according to the U.S. Census Bureau, there will be more elderly Americans than children under 18 for the first time in U.S. history. This "graying of America"— a trend similar in many other developed nations — could quickly place more demand on health care than there is supply.
However, I have seen many developments over the past year that have convinced me the health-care sector will continue to grow, innovate and meet the higher demand. And just as COVID-19 accelerated the digital economy by five to 10 years, it has accelerated the scientific and medical economy as well.
In fact, many innovative companies — especially in the biotech/pharma and life science and tools areas — have yet to unlock their full potential because they continue to focus their resources on COVID-19. Similarly, many medical device and health-care service companies face near-term challenges because elective procedures and doctor office visits have not recovered to their pre-COVID levels. As we come out of the pandemic, each of these industries, and more specifically many of these platforms, can focus on other unmet medical needs and therapeutic areas. And these markets — e.g., oncology, autoimmune, rare disease — are enormous. We see investment opportunities in innovative drug, device and service companies that are improving the ability to diagnose and treat disease, provide better access to care, lower costs and generate better clinical outcomes.